November 2014

Welcome to the latest issue of D&B's Country Risk Update

Global Economic Outlook: Q3 US growth masks domestic weakness.

The choppy, uneven global recovery continues amid diverging growth patterns. Positively, the first estimates for US growth in Q3 were above market expectations, at an annualised 3.5%; however, domestic drivers remain weak with the major impetus coming from strong export growth, which given global demand weakness is unlikely to be replicated going forward. Meanwhile, the euro zone faces the prospect of entering an unprecedented triple dip recession, and growth in major emerging markets continues to slow. As such, we forecast real global growth of 2.3% in 2014 and 2.9% in 2015.

However, despite the marked fall in oil prices downside risks still outweigh upside risks. In particular, with the US Federal Reserve quantitative easing programme ended, market uncertainty is now focused on the timing and size of the inevitable interest rate rises. Markets are also unsettled by the consequent strengthening of the US dollar, while the reduction in global liquidity will hit capital flows into the emerging markets and the prospect of deflation threatens European growth prospects.

This complimentary newsletter from D&B's Country Insight Services group has been put together by their team of experts using the most up-to-date information to provide a snapshot of the latest macro market risk situation, and provides an excellent overview for those exposed to cross-border credit or investment risks.